According to the dictionary:
Health = the state of being free from illness or injury.
Healthcare = the maintenance and improvement of physical and mental health, especially through the provision of medical services.
While this is true, the modern understanding of healthcare has morphed into what we call “paying for sickcare”– when one becomes sick, “healthcare” is what we pay for to fix us.
It’s a bit of a misnomer. The traditional “healthcare” space profits from sickness. If 98% of their revenue comes from sickness, they’ll likely have a hard time convincing the American public that they want to prevent their own profits with health and wellness. There’s also a second conundrum. The current business model of sickcare depends upon the transaction between payors (health insurance companies like Aetna and Medicare) and providers (hospitals/doctors). The processes that power this sickcare delivery are locked in by the contractual wrangling between these two entities. As these transactions become more and more squeezed by federal and state regulations, the patient experience will suffer– there will be even less money for deliverers to provide a pleasant experience for patients. So the patients paying more and more premiums (it’s currently about $11,000 per year per employee) for today’s “health” transaction will witness a worsening experience.
So what does this mean to our nation’s health and happiness?
The traditional sickcare companies will have branding and execution problems. Since their money mainly comes from sickness, they’re tied to the sickness transaction between them and the insurance companies. They’re bound by the legacy business model, rules, and regulations. They’re bound to reimbursement rules that devalue prevention. Can they provide a transparent, affordable, pleasant, communicative true “health and happiness” experience that’s fundamentally and obviously better than today’s miserable sickcare experience? Essentially, can they disrupt their current business model to actually provide a health and prevention service that keeps their customers out of the expensive traditional sickcare industry?
They can’t and they won’t. Or rather, they’ll have serious difficulties disrupting themselves.
So what does this mean for brands that could enter the health space to provide tools and services to maintain health?
Huge opportunity. They won’t have the branding, execution, and financial conflict of interest problems that plague today’s sickcare incumbents. These brands can truly market health products and services with two missions– to keep your body and your bank account well. They can start from the very beginning with processes that make sense to consumers. These are the brands with unfettered access to the current $250 billion health cash market which will rise to $750 billion in the next decade. These are the “light users” of sickcare who have a personal and financial interest in remaining healthy and happy. The 50 million people without health insurance are also included in this group. So who are these brands? Just to name a few…Whole Foods, Safeway, iRobot, Best Buy, Apple, Target, Equinox, Adidas, Nike, and countless startups enabling affordable, healthy, sickness-free living.